SC admits incometax department plea on dividend income !!
Last updated: 24 September 2007
THE Supreme Court has admitted a petition moved by revenue department levy of tax on the dividend income of assessee on which no tax was paid in the contracting country which has signed Double Tax Aviodance Agreement with India.
A bench comprising Justice SH Kapadia and Justice B Sudarshan Reddy after hearing the preliminary plea admitted revunue department’s petition. Solicitor general GE Vahanavati appearing for income-tax department said that a substantial question of law is involved here.
Whether the dividend income on which no tax is paid by the assessee in the country which are part of the Double Taxation Avoidance Agreement could not be taxed here on the ground that the agreement applies only when tax is paid in other contracting country and identical tax is payable in India also, said Mr Vahanavati.
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